While you may prepare as best you can for an emergency, sometimes the unexpected can hit you hard.
That’s especially true when it comes to healthcare. Even if you have savings and health insurance, a single medical crisis can wipe out all of your bank accounts and cause you to rack up medical debt in the process.
If you need help paying medical bills or risk going to medical collections, please know there are steps you can take.
Below are five ways you can handle your medical debt quickly and efficiently. While none of these options are ideal–you can end up paying back more with interest–they will help you manage your debt without going broke.
1. Review your bill with a professional
If you spent time in the hospital and are now facing thousands of dollars in hospital bills, Dr. R. Ruth Linden, president of Tree of Life Health Advocates, recommends asking an expert for help to review your bill.
“Retain a medical billing expert to comb the statement(s) for services that may never have been delivered, duplicate charges, incorrect codes, and the like,” says Dr. Linden.
A medical billing expert can sometimes find errors that would have otherwise cost you hundreds or even thousands of dollars.
And if a billing advocate doesn’t find any errors they most likely will not charge for their services, according to Dr. Linden.
2. Contact the provider directly
If there are no errors found on the bill, Dr. Linden still recommends reaching out to the healthcare provider.
“In the case of a hospital bill, apply to the provider for financial assistance,” Dr. Linden explains. “For non-hospital providers, request full or partial forgiveness of the bill.”
In many cases, a letter can make all the difference in reducing your bill.
“My experience is that a skillfully crafted letter that includes a detailed explanation of one’s financial situation and other relevant, challenging circumstances, followed by telephone calls, can result in a significant reduction or complete elimination of the balance due,” says Dr. Linden.
If your healthcare provider is not willing to reduce your balance, they may be willing to put you on a payment plan. This would let you pay in installments, rather than demanding you pay the balance all at once.
You may even be able to spread your repayment out over the course of a few years, making a large amount of medical debt more manageable on your household budget.
3. Sign up for CareCredit
CareCredit is a credit card designed specifically for out-of-pocket medical costs. Most medical offices will accept CareCredit as payment, and the company offers promotional offers to make payments more affordable.
When you make a charge, you generally get a promotional period of six to 24 months, depending on the procedure you charge and its cost. During the promotional period, the company does not charge any interest.
And if you pay off the balance in full before the promotional period ends, you pay zero interest on the charge.
However, if you still have a balance after the promotional period ends, you will get hit with interest that accrued throughout the whole promotion, adding hundreds or thousands to your bill.
While CareCredit can be useful, choose this route carefully to avoid extra charges.
4. Take out a personal loan
Another option to consider is taking out a personal loan.
If you’re facing a financial emergency due to medical debt, personal loans can be a way to manage your expenses without resorting to high-interest credit cards or dangerous payday loans.
While you will pay interest with a personal loan, the interest rates are generally much lower than a credit card.
Keep in mind, however, that taking out a personal loan is a big financial decision. And if you miss payments, it can have serious ramifications on your finances.
Therefore, weigh your options carefully before going this route. Additionally, make sure you have a repayment plan in place to manage the debt.
5. Negotiate the balance
In some circumstances, the hospital or medical office would rather get some money rather than not at all. That’s why Dr. Linden encourages people to contact the provider to negotiate.
“This is the most important and least often used tool,” Dr. Linden says. “If no errors, duplicate charges, incorrect codes, etc. have been found and a written request for forgiveness falls on deaf ears, negotiate the balance due.”
In many cases, the provider will reduce the bill in return for quick payment.
“To wit, a patient might say, ‘If you’ll accept X% of the balance due as full and final payment by the first of next month, I will send you a check. Would you agree to this arrangement? Yes? Good. I’ll follow up in writing that we’ve settled on this plan,’” says Dr. Linden.
Managing medical debt isn’t hopeless
Handling a medical emergency can be physically, mentally, and financially draining. However, using any of the options listed above can help minimize the impact of medical debt on your future.
For more information on how to manage a crisis that may wreck your bank account, check out this article on where to keep your emergency fund.
Interested in a personal loan?Here are the top personal loan lenders of 2017!
|Lender||Rates (APR)||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Important Disclosures for Citizens Bank.
Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
Citizens Bank Disclosures
Personal Loan Rate Disclosure: Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 1, 2017, the one-month LIBOR rate is 0.98%. Variable interest rates range from 5.97% - 15.72% (5.97% - 15.72% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% - 16.24% (5.99% - 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term(see examples), and include Loyalty1 and Automatic Payment2 discounts of 0.25 percentage points each, as outlined in the Loyalty Discount1 and Automatic Payment2 Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
|5.67% - 29.99%||$1,000 - $50,000||Visit Upstart|
|4.99% - 14.24%1||$5,000 - $100,000||Visit SoFi|
|8.00% - 25.00%||$5,000 - $35,000||Visit Payoff|
|5.97% - 16.24%2||$5,000 - $50,000||Visit Citizens|
|5.99% - 35.89%||$5,000 - $50,000||Visit LendingClub|
|5.25% - 12.00%||$2,000 - $50,000||Visit Earnest|
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